Extract F: Solutions to the problem of in-work poverty
Charities and think tanks have called for action to reduce job insecurity, lower housing costs and increase earnings for low-paid workers. Frances O’Grady, the former general secretary of the Trades Union Congress, said: “The government must crack down on business models based on poverty pay and insecure jobs. Zero-hour contracts should be banned and the minimum wage must go up to at least £10 per hour right away.” The Chartered Institute for Personnel and Development called on companies to play their part in preventing working poverty by paying employees a living wage: ‘Not only is there a strong moral case for paying staff a living wage, there is also a compelling business case, with research showing that money and debt problems may affect people’s performance at work, which can hurt a company’s profits.’
If the labour market cannot pay sufficiently high wages to prevent poverty, a possible policy is to use means-tested benefits to make up shortfalls in household incomes. However, the introduction of Universal Credit, which rolls six benefits into one, did not help some low-income families because of complexities involved in claiming it, and the time lag before claimants could receive their first payment.
Increasingly, households in poverty have been looking beyond both employers and the government for support. Charities and food banks have never been busier. The Trussell Trust reported that in 2020–21, 2.5 million emergency food parcels were delivered, an increase of 128% on 2015–16. Even professional workers are sometimes using food banks, alongside other sources of support. The Royal College of Nursing reported that, during the previous 12 months, more than half of their members had relied on food banks, credit or borrowing from friends and family to pay essential living costs. Source: News reports, 2021
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